Dunnellon rolls out smaller budget, higher tax rate

The city unveiled a $2.7 million budget Monday that cuts deeply into city services, axes several positions and eliminates at least one service — mosquito control — altogether.

By Tom McNiffManaging editor

DUNNELLON — The city has managed to create a budget for the next fiscal year, but not without some pain.

Dunnellon leaders unveiled a $2.7 million budget Monday that cuts deeply into city services, axes several positions and eliminates at least one service — mosquito control — altogether.

While the proposed budget is smaller than this year’s $3.66 million spending plan, the City Council proposes a higher tax rate to offset significant losses in revenue. The city is expected to lose tens of thousands of dollars in gas tax money this year, hundreds of thousands in revenue from its Greenlight Communications system, and hundreds of thousands of dollars more in fines from red light traffic cameras, which were discontinued several months ago.

The proposed tax rate is 7.1408 mills, compared with 6.8013 this year. If the budget and tax rate are approved later this month, a city resident with a $150,000 home and a $50,000 homestead exemption would pay an additional $33.95 in property taxes.

Under the budget, the police department would lose two part-time officers and will have to let go of two full-time officers midway through the budget year if the city’s financial picture doesn’t improve. One of those officers had been paid through a grant, but the grant has expired and the city does not have the money to fund the position beyond the end of January.

Police Chief Joanne Black said she and her lieutenant will spend more time on patrol to make up for the losses.

“We’re going to weather this storm and pull together and try to make it through this year, and hopefully things will be better next year,” she said Tuesday. “But we do not want to jeopardize public safety or officer safety.”

The city is also considering limiting the hours of its planning and permitting department to half days to save money.

The main culprit for the cuts is Greenlight Communications, the city’s telecommunications system that has been hemorrhaging money since its inception two years ago.

A financial review of the system by an outside accountant revealed two months ago that Greenlight was losing about $250,000 a month and that city administrators had been improperly covering the losses out of money that had been borrowed for water and sewer work.

Interim City Manager Eddie Esch stopped that practice, which started under former City Manager Lisa Algiere, and said he made enough cuts in Greenlight to reduce the monthly losses to a more manageable $125,000.

Still, Dunnellon officials said the city can’t handle Greenlight’s losses much longer and have been negotiating with private telecommunications provider Wideband Networks to take over the struggling system before it bankrupts the city.

Even if the deal goes through in the coming weeks, the city will remain saddled with a substantial amount of the $8 million in debt it incurred to start up Greenlight. Wideband has offered just $3.9 million for the system. That would leave the city with about $4.1 million still to be repaid to Region’s Bank, which loaned Dunnellon the money for the venture.

But Greenlight isn’t the only drain on the city’s budget.

The City Council decided at the beginning of the summer to discontinue the use of its red light traffic cameras, which were generating more than $300,000 in fines annually for the city. The decision was hailed by residents, but it also left the city with a hole in its budget.

Further complicating Dunnellon’s financial situation, the County Commission has decided to move toward keeping all local gas tax revenues for itself. Traditionally, gas tax revenues have been divided among the county and area municipalities, but the commission is planning to phase the cities out of their share over the next three years.

Those dollars were to be used for road work and maintenance.

As they work through their budget cuts, city officials are simultaneously eyeing new “revenue streams” to help keep the city in the black.

That likely means new fees. Mayor Nathan Whitt has tossed around a number of ideas, including new a new recreation fee.

On Monday, he said he was also considering installing parking meters along the street where tubers and other visitors park when they come to enjoy the Rainbow River for the day.

And he’s considering asking Marion County government officials to impose a surcharge on the tubers who launch from county-owned KP Hole park. That fee would go to the city of Dunnellon, Whitt said, to help defray the cost of using city police and firefighters to rescue tubers and others who end up requiring help.

City fire and police officials say they respond to an average of about 35 distress calls a year on the river.